Plug Power’s stock soared to a high of $11.41 a share, up 32 percent, on Monday following a big order from Wal-Mart Stores, Inc. for its fuel cells.
The Latham fuel cell maker’s value on the stock market, or market cap, reached $1.21 billion. Erik Hansen, vice president of sales at Plug Power, credits the surge in stock to the Wal-Mart deal.
“We work with some really big names. All of our customers are Fortune 500 companies and they have seen the benefits our products bring,” Hansen said. “But this order with Wal-Mart brings credibility for people on the street. People understand when Wal-Mart does something it was well thought out and planned.”
Plug Power makes hydrogen fuel-cell systems, which work to power forklifts and other machinery. Wal-Mart’s order of 1,740 fuel-cell units over the next two years will be used in the retailer’s forklifts at various warehouse and distribution centers.
Hansen said the use of hydrogen fuel cells rather than batteries enables forklifts to run longer. Using Plug’s technology, Wal-Mart’s forklifts could run up to 10 hours, compared with about 8 hours using batteries.
“All of their electrics are battery-powered and those batteries only last a certain number of hours per charge,” he said. “Imagine 250 lift trucks running 24 hours a day where every eight hours each truck has to recharge. Those man-hours involved are just wasted.”
Plug Power’s contract with Wal-Mart is open-ended, Hansen said. The retailer could expand its order in the near future. The order is the company’s biggest to date. Hansen did not disclose terms of the deal.
The news comes after Plug Power was nearly delisted from the Nasdaq stock exchange last year when the company’s stock dropped below $1 per share, with a 14-cent low. But in December, Plug’s stock rose above $1, meeting Nasdaq’s minimum requirement.
The homegrown company was founded in 1997. Plug Power went public at $15 a share two years later. Its stock peaked in 2000 at $150 a share. Following a sharp decline, the company is gaining momentum and expecting to turn a profit later this year.
“Our employees went through a lot last year and it’s no secret that it was a difficult year for Plug Power,” Hansen said. “We had some product issues and finance issues that we had to work through and we have done that. I think our employees are stronger for that and reaping the rewards for the hard work they have put in for a long period of time, not just last year.”
The company posted annual sales of $24.5 million over the past year. Plug Power has about 175 employees in Latham and is looking to hire several more in its sales and service departments.
Other than forklifts, Hansen said Plug Power’s fuel cells are also used in ground support equipment at airports, refrigerated trucks and electric vans. The company has also flirted with the idea of fuel cell cars.
“We’ve always talked about doing cars, but the auto guys are really doing that work on their own,” Hansen said. “We’re trying not to broaden too much and looking only at products that have some relationship to material handling. We want to leverage the learning and products we have today.”